Credit Repair Process. Myth or Reality? - May 16, 2008
We all have heard about credit repair. A lot of companies offer bad credit repair services and some of them are available online. But is it really such an easy thing to restore or improve your good credit score? Let us see what credit repair is and how it works. Business literature gives us a following definition of credit repair:
Credit repair is a process of disputing or correcting discrepancies shown on credit bureau reports in order to obtain the highest and most accurate ratings for consumers. Reporting is done by three agencies and is subject to consumer disputes and creditor reporting for both positive and negative consumer activity. Credit repair does not resolve your debts, it simply “cleans” up your credit.
So let’s take an example and see how the whole thing works. Let’s assume that you have a negative record in your credit history. For instance, you had a late mortgage payment in 2005 and that led to serious credit score decrease. According to Fair and Accurate Credit Transactions Act (FACT Act) and the FDCPA (Fair Debts Collections Practices Act) your creditors must prove the fact of your late payment. So here is the main field of operations for credit repair companies. They scrutinize your credit report send a letter of inquiry to the credit organization that has put a negative item in your credit history and ask them to prove the fact of late mortgage payment. Usual practice is as follow: creditor doesn’t respond to any inquiries or has no data that proves your late payment (or anything else). In both cases the bad item is removed from your credit record and your rating improves.
So, as you can see, it’s quite possible to repair your credit legally. Yes, it will cost you some money and time, but the benefits of using cheap credits of any kind are much higher, I assure you.
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